EXHIBIT h(ii)
SUB-ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT is made as of _________________, 1999 by and between
RS INVESTMENT TRUST, a Massachusetts business trust (the "Fund"), and
PFPC INC., a Delaware corporation ("PFPC"), which is an indirect wholly
owned subsidiary of PNC Bank Corp.
W I T N E S S E T H :
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund wishes to retain PFPC to provide sub-administration and
accounting services to its investment portfolios listed on Exhibit A attached
hereto and made a part hereof, as such Exhibit A may be amended from time to
time (each a "Portfolio"), and PFPC wishes to furnish such services.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and intending to be legally bound hereby the parties hereto
agree as follows:
1. DEFINITIONS. AS USED IN THIS AGREEMENT:
(a) "1933 Act" means the Securities Act of 1933, as amended.
(b) "1934 Act" means the Securities Exchange Act of 1934, as amended.
(c) "Authorized Person" means any officer of the Fund and any other person
duly authorized by the Fund's Board of Trustees to give Oral
Instructions and Written Instructions on behalf of the Fund and listed
on the Authorized Persons Appendix attached hereto and made a part
hereof or any amendment thereto as may be received by PFPC. An
Authorized Person's scope of authority may be limited by
the Fund by setting forth such limitation in the Authorized Persons
Appendix.
(d) "CEA" means the Commodities Exchange Act, as amended.
(e) "Change of Control" means a change in ownership or control (not
including transactions between wholly-owned direct or indirect
subsidiaries of a common parent) of 25% or more of the beneficial
ownership of the shares of common stock or shares of beneficial
interest of an entity or its parent(s).
(f) "Oral Instructions" mean oral instructions received by PFPC from an
Authorized Person or from a person reasonably believed by PFPC to be
an Authorized Person.
(g) "SEC" means the Securities and Exchange Commission.
(h) "Securities Laws" means the 1933 Act, the 1934 Act, the 1940 Act and
the CEA.
(i) "Shares" means the shares of beneficial interest of any series or
class of the Fund.
(j) "Written Instructions" mean written instructions signed by an
Authorized Person and received by PFPC. The instructions may be
delivered by hand, mail, tested telegram, cable, telex or facsimile
sending device.
2. APPOINTMENT. The Fund hereby appoints PFPC to provide sub-administration
and accounting services to each of the Portfolios, in accordance with the
terms set forth in this Agreement. PFPC accepts such appointment and
agrees to furnish such services.
3. DELIVERY OF DOCUMENTS. The Fund has provided or, where applicable, will
provide PFPC with the following:
(a) certified or authenticated copies of the resolutions of the Fund's
Board of Trustees, approving the appointment of PFPC or its affiliates
to provide services to each Portfolio and approving this Agreement;
(b) a copy of Fund's most recent effective registration statement;
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(c) a copy of each Portfolio's advisory agreement or agreements;
(d) a copy of the distribution agreement with respect to each class of
Shares representing an interest in a Portfolio;
(e) a copy of any additional administration agreement with respect to a
Portfolio;
(f) a copy of any shareholder servicing agreement made in respect of the
Fund or a Portfolio; and
(g) copies (certified or authenticated, where applicable) of any and all
amendments or supplements to the foregoing.
4. COMPLIANCE WITH RULES AND REGULATIONS.
PFPC undertakes to comply with all applicable requirements of the
Securities Laws, and any laws, rules and regulations of governmental
authorities having jurisdiction with respect to the duties to be performed
by PFPC hereunder. Except as specifically set forth herein, PFPC assumes
no responsibility for such compliance by the Fund or any Portfolio.
5. INSTRUCTIONS.
(a) Unless otherwise provided in this Agreement, PFPC shall act only upon
Oral Instructions and Written Instructions.
(b) PFPC shall be entitled to rely upon any Oral Instructions and Written
Instructions it receives from an Authorized Person (or from a person
reasonably believed by PFPC to be an Authorized Person) pursuant to
this Agreement. PFPC may assume that any Oral Instruction or Written
Instruction received hereunder is not in any way inconsistent with the
provisions of organizational documents or this Agreement or of any
vote, resolution or proceeding of the Fund's Board of Trustees or of
the Fund's shareholders, unless and until PFPC receives Written
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Instructions to the contrary.
(c) The Fund agrees to forward to PFPC Written Instructions confirming
Oral Instructions (except where such Oral Instructions are given by
PFPC or its affiliates) so that PFPC receives the Written Instructions
by the close of business on the same day that such Oral Instructions
are received. The fact that such confirming Written Instructions are
not received by PFPC shall in no way invalidate the transactions or
enforceability of the transactions authorized by the Oral
Instructions. Where Oral Instructions or Written Instructions
reasonably appear to have been received from an Authorized Person,
PFPC shall incur no liability to the Fund in acting upon such Oral
Instructions or Written Instructions provided that PFPC's actions
comply with the other provisions of this Agreement.
6. RIGHT TO RECEIVE ADVICE.
(a) ADVICE OF THE FUND. If PFPC is in doubt as to any action it should or
should not take, PFPC may request directions or advice, including Oral
Instructions or Written Instructions, from the Fund.
(b) ADVICE OF COUNSEL. If PFPC shall be in doubt as to any question of
law pertaining to any action it should or should not take, PFPC may
request advice at its own cost from such counsel of its own choosing
(who may be counsel for the Fund, the Fund's investment adviser or
PFPC, at the option of PFPC).
(c) CONFLICTING ADVICE. In the event of a conflict between directions,
advice or Oral Instructions or Written Instructions PFPC receives from
the Fund and the advice PFPC receives from counsel, PFPC may rely upon
and follow the advice of counsel, provided that it takes reasonable
steps to notify the Fund of its intention
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to follow such advice. In the event PFPC so relies on the advice of
counsel, PFPC remains liable for any action or omission on the part of
PFPC which constitutes willful misfeasance, bad faith, gross
negligence or reckless disregard by PFPC of any duties, obligations or
responsibilities set forth in this Agreement.
(d) PROTECTION OF PFPC. PFPC shall be protected in any action it takes or
does not take in reliance upon directions, advice or Oral Instructions
or Written Instructions it receives from the Fund or from counsel and
which PFPC believes, in good faith, to be consistent with those
directions, advice and Oral Instructions or Written Instructions.
Nothing in this section shall be construed so as to impose an
obligation upon PFPC to seek such directions, advice or Oral
Instructions or Written Instructions. Nothing in this subsection
shall excuse PFPC when an action or omission on the part of PFPC
constitutes willful misfeasance, bad faith, gross negligence or
reckless disregard by PFPC of any duties, obligations or
responsibilities set forth in this Agreement.
7. RECORDS; VISITS.
(a) The books and records pertaining to the Fund and the Portfolios which
are in the possession or under the control of PFPC shall be the
property of the Fund. Such books and records shall be prepared and
maintained as required by the 1940 Act and other applicable securities
laws, rules and regulations. The Fund and Authorized Persons shall
have access to such books and records at all times during PFPC's
normal business hours. Upon the reasonable request of the Fund,
copies of any such books and records shall be provided by PFPC to the
Fund or to an Authorized Person, at the Fund's expense.
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(b) PFPC shall keep the following records:
(i) all books and records with respect to each Portfolio's books of
account;
(ii) records of each Portfolio's securities transactions; and
(iii) all other books and records as PFPC is required to maintain
pursuant to Rule 31a-1 of the 1940 Act in connection with the
services provided hereunder.
8. CONFIDENTIALITY. PFPC agrees to keep confidential all records of the Fund
and information relating to the Fund and its shareholders, unless the
release of such records or information is otherwise consented to, in
writing, by the Fund. The Fund agrees that such consent shall not be
unreasonably withheld and may not be withheld where PFPC may be exposed to
civil or criminal contempt proceedings or when required to divulge such
information or records to duly constituted authorities.
9. LIAISON WITH ACCOUNTANTS. PFPC shall act as liaison with the Fund's
independent public accountants and shall provide account analyses, fiscal
year summaries, and other audit-related schedules with respect to each
Portfolio. PFPC shall take all reasonable action in the performance of its
duties under this Agreement to assure that the necessary information is
made available to such accountants for the expression of their opinion, as
required by the Fund.
10. DISASTER RECOVERY. PFPC shall enter into and shall maintain in effect with
appropriate parties one or more agreements making reasonable provisions for
emergency use of electronic data processing equipment to the extent
appropriate equipment is available. In the event of equipment failures,
PFPC shall, at no additional expense to the Fund, take reasonable steps to
minimize service interruptions. PFPC shall have no liability with respect
to the loss of data or service interruptions caused by equipment failure,
provided
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such loss or interruption is not caused by PFPC's own willful misfeasance,
bad faith, gross negligence or reckless disregard of its duties or
obligations under this Agreement.
11. YEAR 2000 READINESS DISCLOSURE. PFPC (a) has reviewed its business and
operations as they relate to the services provided hereunder, (b) has
developed or is developing a program to remediate or replace computer
applications and systems, and (c) has developed a testing plan to test the
remediation or replacement of computer applications/systems, in each case,
to address on a timely basis the risk that certain computer
applications/systems used by PFPC may be unable to recognize and perform
properly date sensitive functions involving dates prior to, including and
after December 31, 1999, including dates such as February 29, 2000 (the
"Year 2000 Challenge"). To the best of PFPC's knowledge and belief, the
reasonably foreseeable consequences of the Year 2000 Challenge will not
adversely effect PFPC's ability to perform its duties and obligations under
this Agreement.
12. COMPENSATION. As compensation for services rendered by PFPC during the
term of this Agreement, the Fund, on behalf of each Portfolio, will pay to
PFPC a fee or fees as may be agreed to in writing by the Fund and PFPC.
13. INDEMNIFICATION. The Fund, on behalf of each Portfolio, agrees to
indemnify and hold harmless PFPC and its affiliates from all taxes,
charges, expenses, assessments, claims and liabilities (including, without
limitation, liabilities arising under the Securities Laws and any state or
foreign securities and blue sky laws, and amendments thereto), and
reasonable expenses, including (without limitation) reasonable attorneys'
fees and disbursements arising directly or indirectly from any action or
omission to act which PFPC takes (i) at the request or on the direction of
or in reliance on the advice of the
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Fund or (ii) upon Oral Instructions or Written Instructions. Neither PFPC,
nor any of its affiliates, shall be indemnified against any liability (or
any expenses incident to such liability) arising out of PFPC's or its
affiliates' own willful misfeasance, bad faith, negligence or reckless
disregard of its duties and obligations under this Agreement. Any amounts
payable by the Fund hereunder shall be satisfied only against the relevant
Portfolio's assets and not against the assets of any other investment
portfolio of the Fund.
14. RESPONSIBILITY OF PFPC.
(a) PFPC shall be under no duty to take any action on behalf of the Fund
or any Portfolio except as specifically set forth herein or as may be
specifically agreed to by PFPC in writing. PFPC shall be obligated to
exercise care and diligence in the performance of its duties
hereunder, to act in good faith and to use its best efforts, within
reasonable limits, in performing services provided for under this
Agreement. PFPC shall be liable for any damages arising out of PFPC's
failure to perform its duties under this Agreement to the extent such
damages arise out of PFPC's willful misfeasance, bad faith, gross
negligence or reckless disregard of such duties.
(b) Without limiting the generality of the foregoing or of any other
provision of this Agreement, (i) PFPC shall not be liable for losses
beyond its control, provided that PFPC has acted in accordance with
the standard of care set forth above; and (ii) PFPC shall not be
liable for (A) the validity or invalidity or authority or lack thereof
of any Oral Instruction or Written Instruction, notice or other
instrument which conforms to the applicable requirements of this
Agreement, and which PFPC reasonably believes to be genuine; or (B)
subject to Section 10, delays or
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errors or loss of data occurring by reason of circumstances beyond
PFPC's control, including acts of civil or military authority,
national emergencies, labor difficulties, fire, flood, catastrophe,
acts of God, insurrection, war, riots or failure of the mails,
transportation, communication or power supply.
(c) Notwithstanding anything in this Agreement to the contrary, neither
PFPC nor its affiliates shall be liable to the Fund or to any
Portfolio for any consequential, special or indirect losses or damages
which the Fund or any Portfolio may incur or suffer by or as a
consequence of PFPC's or any affiliates' performance of the services
provided hereunder, whether or not the likelihood of such losses or
damages was known by PFPC or its affiliates.
15. DESCRIPTION OF ACCOUNTING SERVICES ON A CONTINUOUS BASIS.
PFPC will perform the following accounting services with respect to each
Portfolio:
(i) Journalize investment, capital share and income and expense
activities;
(ii) Verify investment buy/sell trade tickets when received from the
investment adviser for a Portfolio (the "Adviser") and transmit
trades to the Fund's custodian (the "Custodian") for proper
settlement;
(iii) Maintain individual ledgers for investment securities;
(iv) Maintain historical tax lots for each security;
(v) Reconcile cash and investment balances of the Fund with the
Custodian, and provide the Adviser with the beginning cash balance
available for investment purposes;
(vi) Update the cash availability throughout the day as required by the
Adviser;
(vii) Post to and prepare the Statement of Assets and Liabilities and the
Statement of Operations;
(viii) Calculate various contractual expenses (E.G., advisory and custody
fees);
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(ix) Monitor the expense accruals and notify an officer of the Fund of
any proposed adjustments;
(x) Control all disbursements and authorize such disbursements upon
Written Instructions;
(xi) Calculate capital gains and losses;
(xii) Determine net income;
(xiii) Obtain security market quotes from independent pricing sources
approved by the Adviser, or if such quotes are unavailable, then
obtain such prices from the Adviser, and in either case calculate
the market value of each Portfolio's Investments;
(xiv) Transmit or mail a copy of the daily portfolio valuation to the
Adviser;
(xv) Compute net asset value;
(xvi) As appropriate, compute yields, total return, expense ratios,
portfolio turnover rate, and, if required, portfolio average
dollar-weighted maturity; and
(xvii) Prepare a monthly financial statement, which will include the
following items:
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Cash Statement
Schedule of Capital Gains and Losses.
16. DESCRIPTION OF SUB-ADMINISTRATION SERVICES ON A CONTINUOUS BASIS.
PFPC will perform the following sub-administration services with respect to
each Portfolio:
(i) Prepare quarterly broker security transactions summaries;
(ii) Prepare monthly security transaction listings;
(iii) Supply various normal and customary Portfolio and Fund statistical
data as requested on an ongoing basis;
(iv) Prepare for execution and file the Fund's Federal and state tax
returns;
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(v) Prepare and file with the SEC the Fund's annual, semi-annual, and
quarterly shareholder reports;
(vi) Monitor each Portfolio's status as a regulated investment company
under Sub-chapter M of the Internal Revenue Code of 1986, as
amended;
(vii) Coordinate contractual relationships and communications between the
Fund and its contractual service providers;
(viii) Monitor the Fund's compliance with the amounts and conditions of
each state qualification.
(ix) Prepare, coordinate with Fund Counsel and file with the SEC
Post-Effective Amendments to the Fund's Registration Statement,
prepare reports to the Fund's shareholders of records and the SEC
including the preparation and filing of (i) semi-annual reports on
Form N-SAR and (ii) Notices pursuant to Rule 24f-2 and assist in
preparation of notices of Annual or Special Meetings of Shareholders
and Proxy materials relating to such meetings;
(x) Provide individuals reasonably acceptable to the Fund's Board of
Trustees to serve as "non-policy making" officers of the Fund, who
will be responsible for the administration of certain of the Fund's
affairs as determined by the Fund's Board of Trustees; and
(xi) Obtain and maintain fidelity bonds and directors and officers/errors
and omissions insurance policies for the Fund in accordance with the
requirements of Rules 17g-1 and 17d-1(d)(7) under the 1940 Act as
such bonds and policies are approved by the Fund's Board of
Trustees.
17. DURATION AND TERMINATION. This Agreement shall continue initially for two
years unless terminated for cause by the Fund. The Fund may terminate this
Agreement for cause only if the following have occurred: (i) the Fund gives
PFPC notice that for the preceding thirty (30) days PFPC has been in
material breach of the Agreement (and PFPC has in fact been in such
material breach) and that PFPC has thirty (30) days from receipt of such
notice to cure such material breach; (ii) PFPC fails to cure such material
breach within such thirty (30) day period; and (iii) at the conclusion of
such thirty (30) day period the Fund gives PFPC notice that it is
terminating the Agreement. In addition, the
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Fund may terminate the Agreement immediately for cause upon the insolvency
or bankruptcy of PFPC, the commencement by PFPC of a voluntary proceeding
in respect thereof, the commencement of an involuntary proceeding in
respect thereof if not discharged within 30 days, or the appointment of any
receiver or trustee in respect of PFPC or any of its assets. After the
initial two year term, either party may terminate this Agreement on 60 days
prior written notice to the other party.
18. CHANGE OF CONTROL. Notwithstanding any other provision of this Agreement,
in the event of an agreement to enter into a transaction that would result
in a Change of Control of the Fund's adviser or sponsor, the Fund's ability
to terminate the Agreement will be suspended from the time of such
agreement until six months after the Change of Control; provided that this
provision will not limit the initial 2 year term set forth in Section 17
hereof (i.e., the Fund will not be permitted to terminate the Agreement
until the later of the conclusion of the initial 2 year term or the
conclusion of the 6 month period referenced above).
19. NOTICES. All notices and other communications, including Written
Instructions, shall be in writing or by confirming telegram, cable, telex
or facsimile sending device. Notice shall be effective upon receipt.
Notices shall be addressed (a) if to PFPC, at 000 Xxxxxxxx Xxxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000; (b) if to the Fund, at RS Investment
Trust, 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, XX 00000,
Attn: Xxxxxx X. Xxxxxxxx, Secretary; or (c) if to neither of the
foregoing, at such other address as shall have been provided by like
notice to the sender of any such notice or other communication by the
other party.
20. AMENDMENTS. This Agreement, or any term thereof, may be changed or waived
only by written amendment, signed by the party against whom enforcement of
such change or
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waiver is sought.
21. DELEGATION; ASSIGNMENT. PFPC may assign its rights and delegate its duties
hereunder to any majority-owned direct or indirect subsidiary of PFPC or
PNC Bank Corp., provided that (i) PFPC gives the Fund 30 days prior written
notice of such assignment or delegation, (ii) the assignee or delegate
agrees to comply with the relevant provision of the 1940 Act, and (iii)
PFPC and such assignee or delegate promptly provide such information as the
Fund may reasonably request, and respond to such questions as the Fund may
reasonably ask, relative to the assignment or delegation (including,
without limitation, the capabilities of the assignee or delegate).
22. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
23. FURTHER ACTIONS. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
24. MISCELLANEOUS.
(a) This Agreement embodies the entire agreement and understanding
between the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof, provided that
the parties may embody in one or more separate documents their
agreement, if any, with respect to delegated duties and Oral
Instructions. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of
the provisions hereof or otherwise affect their construction or
effect. Notwithstanding any provision hereof, the services of PFPC
are not, nor shall they be, construed as constituting
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legal advice or the provision of legal services for or on behalf of
the Fund or any other person.
(b) The parties agree that the Fund is executing this Agreement on
behalf of each of the Portfolios separately; that each of the
Portfolios is acting solely on its own behalf separately from each
of the other Portfolios and not jointly or jointly and severally
with any of the other Portfolios; that this Agreement shall
constitute, and shall for all purposes be construed to give effect
to the intention of the parties that it constitute, a separate
Agreement between PFPC and the Fund on behalf of each such Portfolio
separately, as if the Fund had executed this Agreement separately on
behalf of such Portfolio; and that no Portfolio shall be liable for
the obligations of any other Portfolio arising hereunder.
(c) A copy of the Agreement and Declaration of Trust of the Fund is on
file with the Secretary of State of The Commonwealth of
Massachusetts, and notice is hereby given that this instrument is
executed on behalf of the trustees of the Fund as trustees and not
individually and that the obligations of this instrument are not
binding upon any of the trustees, officers, or shareholders of the
Fund individually but are binding only upon the assets and property
of the Fund.
(d) This Agreement shall be deemed to be a contract made in Delaware and
governed by Delaware law, without regard to principles of conflicts
of law.
(e) If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
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(f) The facsimile signature of any party to this Agreement shall
constitute the valid and binding execution hereof by such party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PFPC INC.
By:
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Name:
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Title:
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RS INVESTMENT TRUST, on behalf
of its several constituent Portfolios
By:
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Name:
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Title:
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EXHIBIT A
THIS EXHIBIT A, dated as of __________, 1999, is Exhibit A to that certain
Sub-Administration and Accounting Services Agreement dated as of _________, 1999
between PFPC Inc. and RS Investment Trust.
PORTFOLIOS
The Contrarian Fund-TM-
RS Diversified Growth Fund
RS Emerging Growth Fund
RS Global Natural Resources Fund
RS Global Value Fund
RS Growth & Income Fund
The Information Age Fund-TM-
RS MicroCap Growth Fund
RS Partners Fund
RS Value + Growth Fund
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AUTHORIZED PERSONS APPENDIX
NAME (TYPE) SIGNATURE
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